Sales Contracts and Products Liability Article Review

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(O'Reilly, 2003, p.2) But the company is not legally liable if it did all necessary testing, warning, and reasonable evaluation of safety, if for example, an unexpected result occurs through the use of the product.

O'Reilly finds the reasonable person standard troubling, as the reasonable 'average' consumer will not have specialized knowledge that a manufacturer should have about the product he or she is selling. He believes government agencies have too much responsibility to monitor product safety (O'Reilly, 2003, p.3) Also, there is little incentive for CEOs to acknowledge harm and incurr potential lawsuits.

Not only is there negative publicity for consumers, but for corporate investors as well, because of the financial losses that ensue after a recall. For example, the article cites a medical diagnostics company, which failed to satisfy FDA inspectors regarding the quality controls of its factory, recalled thirty products. The company's annual corporate report listed recall costs of $181,000 and overall costs, including inventory write-off and impairment of assets, that totaled $12,752,000.

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.(O'Reilly, 2003, p.1)

Managerial Perspective

Obviously, greater liability for failures to recall products should strike fear into the heart of management -- increasing legal costs, and even technical costs, as companies would be responsible for employing staff to conduct routine tests to discover if a product was in need of a recall on a regular basis because of a hidden design flaw, lest the company become liable. However, it is also noteworthy that product violations may cost the company even more revenue if recalls take place, and voluntary recalls can garner good publicity for the consumers, if not for investors. No business would wish the additional responsibility advocaed by the lawyer in the article, but the issue raised is an important one for businesses. It reminds companies must be vigilant about product safety above and beyond the minimun legal standard of compliance lest the law step in and regulate the issue further......

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"Sales Contracts And Products Liability" (2005, October 28) Retrieved May 2, 2024, from
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"Sales Contracts And Products Liability" 28 October 2005. Web.2 May. 2024. <
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"Sales Contracts And Products Liability", 28 October 2005, Accessed.2 May. 2024,
https://www.aceyourpaper.com/essays/sales-contracts-products-liability-70115
   

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